The Preferences of the Wealthy and Their Role in Our Politics

April 23rd, 2013 at 1:10 pm

A critical concern of our time is not simply our high levels of income inequality and their negative impact on opportunity and mobility.  It’s how inequality and immobility become entrenched in the system—how they replicate.

In a nation like ours, where the flow of money into politics keeps getting stronger, one way this occurs is through the political preferences of the wealthy.  Of course, at any point in our history, the disproportionate policy influence of the wealthy has been a serious problem for our democracy.  But in today’s America, two factors intensify this threat: the increased concentration of economic resources, and the increased access those resources have to the political system.

There’s yet another piece to this puzzle, however, kind of a riff off the old F. Scott Fitzgerald line about the rich being different from the rest of us (i.e., besides “they’ve got more money”).  What are the political preferences of the wealth and how do they differ from those of the rest of us?

That’s the question of this interesting new paper from Page, Bartels, and Seawright (PBS, like the NewsHour!) on the policy preferences of the wealthy.  The results they present are from a small pilot study, and in much of the stuff I extract below, they’re mixing poll results from various sources.  That’s always tricky in this work, because simple wording changes or even the same questions asked at different time periods can skew the comparisons.  But the authors are careful to be upfront about the limitations, and they still come out thinking they’ve found some reliable patterns.

Why, for example, does so much of our current debate focus on cuts to social insurance?  The first figure provides one intuitive answer: the wealthy want cutbacks.  The figure compares the wealthy to the general public on whether they’d like to see federal retirement programs expanded or cutback—the numbers are the net results of subtracting the “cutback” responses from the “expand” ones.

On Social Security, for example, a net of 33% of the wealthy favor cutting it back compared to a net of 46% in the general public who’d like to expand it (why the wealthy want cutbacks relative to the GP is a deeper question for another day).

exp_cut

Source: PBS, Table 4

I’ve been focusing a lot on full employment lately, and recently wrote of the potential importance of direct job creation if the market fails to provide the needed quantity of jobs slots.  Table 5 from PBS shows that rich people aren’t exactly with me on that one (see fourth and last questions).  Only 8% of the wealthy agree that the government should provide jobs for those willing to work but unable to find it, compared to 53% of the GP, a 45 pecentage-point difference.

emp_preftbl5

Source: PBS

I was glad to see that some other differences were smaller, especially the ones asking about food, clothes, and shelter, and a decent living standard for the unemployed.  One interpretation of these differences is that the wealthy may be OK with helping those down on their luck avoid privation, but when it comes to what they perceive as monkeying around with a private sector function of job creation, that’s a bridge too far.

There are many other interesting results in the paper—give it a close read—and not all of them are disheartening to progressives.  For example, in one timely result, majorities of both the wealthy (58%) and the GP (66%) are “willing to pay more taxes for early childhood education in kindergarten and nursery school” (Table 7).  While the budget deficit showed up as a much larger concern to the wealthy than the public at large (providing another example of what’s distorting our current debates), that view flips around special circumstances: a much larger share of the wealthy supports deficit spending in recession/war (73%) than the general public (31%, Table 8).  And here’s a rare point of agreement: about two-thirds of both groups agree that the government has “gone too far in regulating business and interfering with the free enterprise system” (though the question is badly worded–few would agree that “interfering” is a good thing to do; ask aobut regulating the banks and see what you get).

But the broader point—in case you didn’t know it—is not only that the wealthy disproportionately influence policy makers.*  It’s that on some critical fiscal and economic issues, their preferences show less willingness to invest in public education, jobs, and social insurance.  Much of what’s in here, though not all, would lead you closer to the Ryan budget than the CPC budget.

In other words, many of these preferences of the wealthy will reinforce inequality/immobility-inducing policy and block solutions, making this important public opinion research worth keeping a close eye on.  I doubt their opinions will change as they’re rooted in self-interest that’s pretty endemic to human nature.  Thus, the target for democracy becomes their disproportionate influence, and that leads to money in politics and voting rights.

 

*See Martin Gilens, Affluence and Influence, on this point.

 

Print Friendly

13 comments in reply to "The Preferences of the Wealthy and Their Role in Our Politics"

  1. Perplexed says:

    -”Thus, the target for democracy becomes their disproportionate influence, and that leads to money in politics…”

    This research does a great job of articulating many of the ways that the “wealthy” think (and act) very differently than the 99%, but I wonder why they couldn’t have at least included some discussion of how much of the costs of our political campaigns are provided by this tiny minority. Maybe, instead of asking ourselves “what does this group think and what are their preferences?,” we should be asking ourselves “why do we care so much about the preferences of 1% of the population in a democratic republic?” or maybe, more importantly, “does the fact that we now know we need to be so concerned about the preferences of 1% of the population provide enough evidence that, whatever it is we do have, it is not a functioning “democratic republic.” Is it time to face the implications of the reality that, if our democracy was functioning as designed, this question of the differing political perspectives of any group made up of 1% of the population would never arise (except under the circumstances of their Constitutional rights being violated by the majority).

    How long can we can continue to “dance around” this issue while our political institutions are stalemated by those whose power to do so was conferred by their wealth instead of by their proportional voting power before we decide to address it head on? Professor Wilkinson shows here how highly correlated economic inequality is with lack of trust in a society (http://www.ted.com/talks/richard_wilkinson.html), why would we find it surprising that neither the 1% nor the 99% trust the government to do anything about it? As the inequality continues to increase, the trust is also likely to decrease from its already low levels. We would do well to remember that democracy was the solution to the problems caused by “elite” control and put the power in the hands of the citizens. Why would we think that allowing the “elites” to have “veto” power (through election funding) over who is “eligible” to represent us wouldn’t entirely undermine the ability of the democracy to function?


    • Jerome Bigge says:

      The wealthy contribute most of the money to election campaigns, so they are effectively the ones that decide who is allowed to run for office in the first place. In a plutocracy such as the US is, the rest of us count for very little today.


  2. urban legend says:

    The 99% need to learn how to use the money of the 1% against them: every commercial funded by wealthy right wingers should actually work against their preferred candidate and for ours. The official Democratic Party, as beholden to the wealthy as the Republicans, has no capability of doing that. It will never go for the jugular even though right-wing politicians have never been more vulnerable to a sustained, intelligent attack.

    Don’t forget, either, how much the press controls the major media and the national dialogue. Thus we get prominent DC journalists seriously believing that (a) austerity will cause business expansion because it will create “business confidence”; (b) businesses that could be investing profitably are not doing so and are foregoing profits because they are cowering in fear of taxes and regulations that might be imposed sometime in the indefinite future even though they have not even been proposed or discussed; or (c) higher national debt depresses economic growth (rather than vice versa) even when there is no prospect whatsoever that specific debts that comprise it will not be paid when due, when bond investors are demanding interest at real rates below zero, when debt servicing costs are extraordinarily low by historical standards, all the while accepting that the correlation equals causation despite the fact that slow growth by definition, by way of higher safety net expenditures and lower tax revenues in the numerator and a lower denominator from reduced GDP, makes the debt-to-GDP ratio higher.

    Of course, how many of them who buy those arguments even know what a ratio is? Progressives need to learn how to subject those prominent journalists to the mass public ridicule they deserve.


    • Perplexed says:

      Sooner or later, the 99% may actually figure out that they are providing the money that the 1% are using against them. It is government created monopolies and government provided “tax preferences” that are the primary source of the funds used to fund campaigns (which is precisely why funding of campaigns is such a profitable “investment”).

      If they do, they will then understand that publicly financed campaigns would cost them no more than they are paying now, and that there is no need to undermine our democracy by selling access to power in order to fund campaigns.

      After reading the “PBS” paper, my first thought was “I wonder which people in our ‘democracy’ really want their ‘representatives’ spending 20% of their time begging these people for money?” And “If the views (or votes) of those ‘representatives’ differ in any significant way from those of this 1%, how likely are they to succeed in getting any of this money?” What are the odds against them if they don’t succeed?

      “The most important political office is that of the private citizen.” …
      “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” – Justice Louis D. Brandeis

      It appears that the choice has been made for us by our politicians and their “funders” (and now with a nod from “our” Supreme Court). Maybe a few more of “us” should have been asked if it was really OK to go ahead with this?


      • Jerome Bigge says:

        We could also switch from being a “democracy” (in name only) to becoming the world’s first major “demarchy” where representatives are select by lottery, not elections. Currently the licensed professions are the majority in the Senate and they are very over represented in the House. As a percentage of the population they would likely not hold more than half a dozen seats in Congress under a demarchy. Their influence would be reduced to a tiny fraction of what it is today. The same is true of businessmen. Under a demarchy the major of representatives would be ordinary working people. Obviously there would be serious changes if the majority of people in Congress were ordinary workers, not members of the professions or wealthy businessmen.


        • Perplexed says:

          Interesting – its probably highly likely that a random process would probably result in a more representative democracy than what we have now.

          Maybe we need to re-define what qualifies as a democracy so that it excludes “masked plutocracies” specifically from the definition. Exposing the “DINO’s” as what they are would have far-reaching foreign policy implications as well.


  3. Frederic Mari says:

    I would have been surprised at anything else. Indeed, if anything, I do find it interesting and outright heartening that the wealthy support government interventions and taxes for anything but maintaining public order.

    I mean, are we surprised that wealthy folks (…) preferences (…) will reinforce inequality/immobility-inducing policy and block solutions?

    The status quo is immensely favourable to them (i.e. they’re wealthy) so, of course, they think the status quo is dandy! And they naturally want to pass the fruits of their ‘work’ to their offspring, as we all would. I mean, who is for fair competition if it means your own kids might get wiped out?

    http://theredbanker.blogspot.com/2013/01/income-inequality-and-growth.html

    http://theredbanker.blogspot.com/2013/03/inequality-and-growth-sequel.html

    and

    http://theredbanker.blogspot.com/2012/05/taxes-here-comes-great-reaper-part-2.html


  4. Lee A. Arnold says:

    It seems to me that the U.S. is “Custer’s Last Stand” for the wealthy. There are few other countries to move their money, because they are liable to be taxed more, and there is less assurance of continuing political stability. So breaking the welfare state in the U.S. is the way to go.


    • Jerome Bigge says:

      True. The European countries tax their wealthy more than we do. This may be why about 40% of the world’s billionaires live in the US. Our total tax burden is one of the lowest for a developed country. So the US is in fact an ideal country for the rich. Additionally they can can effectively control the federal government and state governments to a degree impossible to do elsewhere. For them the “American Dream” is alive and well. For the rest of us it is more an “American nightmare” as most Americans would be better off elsewhere in the developed world than living here in the USA.


  5. Alex Blaze says:

    The wealthy aren’t that against providing basics to the poor and making the minimum wage a living wage.

    Sure, you’d starve if you only had food stamps for food and the minimum wage isn’t actually enough to live on, but that 40-ish% support is probably why we’re 40% of the way there on those goals.


  6. Patricia Shannon says:

    I have been thinking that the support by the rich for austerity measures during recession/depression shows stupidity, but lately I’ve realized that some are benefiting. They have enough wealth to maintain their own holdings, and are able to accumulate the property that the middle and lower classes are losing. If they are as smart as some would have us believe, they are smart enough to understand this. And they have shown their lack of morality by their activities in blocking protection of the environment that our species depends on.


    • Perplexed says:

      Fortunately, as it turns out, there are not a great deal of “smarts” required. If you think it through for minute from their perspective, you’re likely to realize that if you had $10′s of billions, or $billions, or $100′s of millions, or $10′s of millions, it would be a much higher priority for you to maintain the purchasing power of what you already have, than it would be to take on risk in order to increase it. The biggest risks to the purchasing power you already have are inflation, taxes, and maybe bond “haircuts.” So if you can minimize deficit spending you can reduce the chances of inflation down the line as well as reduce the chances that the government will increase your taxes to either pay the interest costs or pay down the debt. Now, if you could just get enough control of the government so that banks are bailed out and there are no haircuts, and then change the discussion from stimulus needed to get the economy back on track to controlling deficit spending to “protect the grandchildren” or whatever other nonsense you can get people to believe, you’ve pretty much covered your major risks.

      Good thing we have a representative democracy in place to keep this kind of thing from actually being implemented though isn’t it?


      • Pusscat says:

        Thank you Perplexed and all you other thoughtful Americans.
        Just want to add that the relentless concentration of wealth in fewer and fewer hands, and the attendant erosion of democratic institutions, are proceeding apace here in Australia also.
        Demarchy is a novel idea for me to contemplate as our ship goes down….Thanks, Jerome!


Leave a Reply

Your email address will not be published.

Current ye@r *